Fuel Assurance Initiative: Fuel and Performance Incentives ... · Initiative: Fuel and Performance...
Transcript of Fuel Assurance Initiative: Fuel and Performance Incentives ... · Initiative: Fuel and Performance...
DRAFT – FOR DISCUSSION PURPOSES ONLY © 2014 New York Independent System Operator, Inc. All Rights Reserved.
Fuel Assurance
Initiative: Fuel and
Performance Incentives
Critical Operating Day
Incentives
MIWG/ICAP WG/PRLWG February 26, 2015
Krey Control Center, Rensselaer
Dr. Nicole Bouchez Principal Economist, Market Design
New York Independent System Operator
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 2 DRAFT – FOR DISCUSSION PURPOSES ONLY
Today
Today’s meeting continues the overview of potential ICAP
market changes to create additional incentives for ICAP
resource performance on Critical Operating Days.
We introduce an alternative to the EFORd metric: the Upper
Operating Limit (UOL) metric.
As indicated in the last presentation, this is a design concept
that the NYISO thinks is promising and continue to be open to
feedback from stakeholders on any aspect of the proposal
including alternate constructs.
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 3 DRAFT – FOR DISCUSSION PURPOSES ONLY
Fuel Assurance
The NYISO does not need to make costly
changes to its Market Structure for Fuel
Assurance: New York faces a different problem than ISO NE and PJM
face, including different reliability needs.
The NYISO already has in place capabilities in its energy
and capacity markets that are important to fuel
assurance.
The NYISO also faces structural differences from PJM
and ISO NE.
The NYISO wants to establish incentives
tailored to the NY markets that will help us
maintain reliability going forward.
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 4 DRAFT – FOR DISCUSSION PURPOSES ONLY
Fuel Assurance Initiative
Multiple components:
Energy & Ancillary Service Market Changes,
Capacity Market Changes.
Multi-phase with implementation over the next several years.
Fuel Assurance Initiative: Fuel and Performance Incentives
Incent Intra-day
Operational Flexibility
Promote Increased Resource
Availability and
Performance
The NYISO’s Efforts
Capacity Market
• Ways to better incent and reflect performance
• Possible separate Summer/Winter EFORd
Energy Market
• Comprehensive Shortage Pricing
• Comprehensive Scarcity Pricing
• RLS Changes
Gas-Electric Coordination
• EMS Visualization of Gas System
• Gas Operational Information Sharing
• Fuel Availability Self Reporting project
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 5 DRAFT – FOR DISCUSSION PURPOSES ONLY
Fuel Assurance
NYISO needs mechanisms that provide
incentives for suppliers* to be available to
reliably meet the real-time needs of the NYCA -
- especially on days when there is a high risk
of a reduction in real-time resource availability
due to factors including high demand and fuel
supply uncertainty.
* The intent is to have the Performance Incentive apply to ICAP suppliers. This presentation is
focused on how the incentive applies to generators. Future presentations will focus on other types of
capacity suppliers.
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 6 DRAFT – FOR DISCUSSION PURPOSES ONLY
Performance Incentive
Objective: To provide more incentive for units scheduled in the DAM (Energy
and/or reserves) or via timely SRE (or in a Forced Outage at DAM
close) to be available on Critical Operating Days.
• Timely SREs are when the units can still reasonably purchase/schedule
gas.
• Includes units “in a Forced Outage at the time of the DAM close” because
those units are not evaluated by the DAM and because this might create
an incentive to declare a forced outage to avoid being subject to the
Performance Incentive.
Do not want to discourage units from offering in real- time or day
ahead.
Why a Performance Incentive? Increases incentive for units the NYISO is relying on (i.e., scheduled
in the DAM or via SRE) to operate on Critical Operating Days. This
increases resource availability during tight operational periods.
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 7 DRAFT – FOR DISCUSSION PURPOSES ONLY
Performance Incentive
Units will be included in the Performance Incentive
if:
1. The unit is an ICAP Supplier, and
2. The unit is DAM scheduled for Energy or
Reserves, or the unit has been timely SREd
(prior to noon on the day prior to the operating
day), or the unit is in a Forced Outage at the
time of the DAM close, and
3. A Critical Operating Day has been noticed prior
to noon on the day prior to the operating day.
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 8 DRAFT – FOR DISCUSSION PURPOSES ONLY
How it works
On Critical Operating Days compare the unit’s
availability to a baseline.
If the unit, using this metric, under-performs relative
to the baseline, the unit gets a charge,
If the unit, using this metric, over-performs relative
to the baseline, it is eligible to receive a payment,
If the unit, using this metric, neither over- or under-
performs, the unit does not get a charge or a
payment.
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 9 DRAFT – FOR DISCUSSION PURPOSES ONLY
How it works
The revenue collected from charges to under-performers will fund the
payments to over-performers.
If insufficient revenue to pay the over-performers is collected from under-
performers, the collected revenue is distributed pro rata (using a MW
basis) to over-performers.
A “stop loss” provision prevents all the monthly capacity revenue from
being at risk unless there are 5 or more Critical Operating Days in a
Month.
The charges and payments will be assessed on a monthly basis.
If more is collected in charges in a month than is paid out, the excess will
be included with the next month’s charges to fund payments to units
over- performing.
There will be no additional direct charges to loads from this Performance
Incentive. But we do expect there to be behavioral changes as units weigh
the impact of possible charges and payments, and therefore there are
likely to be some costs to loads.
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 10 DRAFT – FOR DISCUSSION PURPOSES ONLY
Performance Metrics: EFORd
EFORd Metric This metric was introduced and reviewed at the October 27
and December 18 ICAP WG meetings.
Baseline: AEFORd
The Performance Incentive for a unit is calculated using
the same rules as the Baseline EFORd* but only on the
days where the unit is subject to the Performance
Incentive.
• Over-performance offsets under-performance.
The net performance determines if it receives a charge (net
under-performance) or a payment (net over-performance)
The Zonal UCAP Price is used to calculate the
performance incentive.
*More than one unit at the same PTID can continue to be aggregated for purposes of GADS/EFORd and for the
performance incentive.
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 11 DRAFT – FOR DISCUSSION PURPOSES ONLY
Performance Metrics: UOL (NEW)
Upper Operating Limit (UOL) Metric Baseline: for under-performance: DAM Schedule (Energy
and Ancillary Services); for over-performance: UCAP MW
The Performance Incentive is calculated by looking at the
Real Time Emergency Upper Operating Limit (UOLe)
relative to the DAM schedule and UCAP MW over the
critical operating days in the month*
• Over-performance offsets under-performance
The net performance determines if they receive a charge
(net under-performance) or a payment (net over-
performance)
The Zonal UCAP Price is used to calculate the
performance incentive.
*The time weighted/integrated UOLe will be compared to the time weighted/integrated DAM schedule over all the
eligible Critical Operating Days.
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 12 DRAFT – FOR DISCUSSION PURPOSES ONLY
Dispatchable Generator Example
0
Maximum output
(MW)
DAM Schedule
(Energy + AS)
UCAP MW
Over-Performance
Eligible for a (pro rata) payment if, on
average over the month’s Critical
Operating Days, the UOLe is in this
range.
Under-Performance
Will receive a charge (penalty) if, on
average over the month’s Critical
Operating Days, the UOLe is in this
range.
No payment or charge in this range.
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 13 DRAFT – FOR DISCUSSION PURPOSES ONLY
Differences and Similarities
EFORd Metric
Based on outages and startup
attempts
Not intuitive or easy to
calculate: EFORd calculation
rules are fairly non-linear/have
break points
Does not differentiate between
outages that impact the unit in
a particular range and those
that don’t (only the impact of
the outage on the EFORd
calculation matters)
Likely to be costly during tight
gas days since generators
have to manage possibility of
being dispatched above their
DAM schedule
UOL Metric
Only based on outages and the
impact of the startup failures on
UOL
More intuitive and easier to
calculate
Differentiates between outages
that impact the unit below a
specific MW level (ex. DAM
schedule or UCAP MW) and
outages that don’t have the
UOL fall below a threshold.
Targets DAM scheduled MW
but does not over encourage
over-procurement of Gas (“not
like New England”) (less cost to
consumers than EFORd metric)
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 14 DRAFT – FOR DISCUSSION PURPOSES ONLY
Issues to be considered
Should units that have not sold ICAP but are DAM scheduled
be included in the performance incentive?
If so, what is their over-performance baseline?
Under the UOL metric, does the Critical Operating Day have
to be noticed prior to noon on the day prior to the operating
day for that day to be a Performance Incentive day?
Is there additional risk for DAM scheduled units if the Critical
Operating day is noticed after noon on the day prior to the
operating day?
SREd units would be noticed as soon as practicable. A
stakeholder requested we consider moving the bright line cut
off earlier to provide more time for gas units to secure fuel. The
NYISO believes that noon balances the SREd unit’s need for
time to secure gas with Operations need to evaluate if SREs are
needed subsequent to the Day Ahead Market run.
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 15 DRAFT – FOR DISCUSSION PURPOSES ONLY
Additional details
The Performance Incentive is assessed on a monthly basis
and is scaled so that a single Critical Operating Day of forced
outage does not account for more than 20% of monthly ICAP
revenue. If there are 5 or more Critical Operating Days the
maximum charge is the monthly ICAP revenue.
This is done using a Stop Loss Factor (renamed from “Scaling
Factor” at stakeholder request) where for one monthly Critical
Operating Day SLF=1/5, two SLF=2/5, …, 5 or more SLF=1.
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 16 DRAFT – FOR DISCUSSION PURPOSES ONLY
Example 1- Under-performing
The ICAP Market Clearing Price for the area that includes the unit “Blue
Generator” (i.e., the Locality or NYCA clearing price) is $6/kW-Month (i.e.,
$6000/MW-Month).
Unit A received a monthly ICAP market payment of 100* (1-0.1)*6000=$540,000 and
their UCAP is 100*(1-0.1)=90MW
In the month of July, there were 6 “two day ahead” called Critical Operating
Days. (i.e., Stop Loss Factor SLF=1)
Unit “Blue Generator” had a DAM schedule on all 6 Critical Operating Days
at 60MW.
Unit “Blue Generator” has an average UOLe of 50MW for those 6 Critical
Operating Days.
Unit “Blue Generator” receives a charge of:
If Average UOLe is less than the average DAM schedule (for under-performance):
[Average UOLe- DAM Schedule]* Zonal UCAP Price*Stop Loss Factor= charge (if
negative)
If Average UOLe is greater than the UCAP MW (for over-performance): [Average
UOLe – UCAP MW]* Zonal UCAP Price* Stop Loss Factor = payment (if posititive)
[50-60]* 6000*1= -60,000 A $60,000 charge.
This means that their total Capacity payments are:
[Auction Revenue]-[Charge]=$540,000-$60,000=$480,000
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 17 DRAFT – FOR DISCUSSION PURPOSES ONLY
Example 2- Over-performing
The ICAP Market Clearing Price for the area that includes the unit “Red
Generator” (i.e., the Locality or NYCA clearing price) is $6/kW-Month (i.e.,
$6000/MW-Month).
Unit A received a monthly ICAP market payment of 100* (1-0.1)*6000=$540,000 and
their UCAP is 100*(1-0.1)=90MW
In the month of July, there were 6 “two day ahead” called Critical Operating
Days. (i.e., Stop Loss Factor SLF=1)
Unit “Red Generator” had a DAM schedule on all 6 Critical Operating Days
at 60MW.
Unit “Red Generator” has an average UOLe of 95MW for those 6 Critical
Operating Days.
Unit “Red Generator” receives a payment of:
If Average UOLe is less than the average DAM schedule (for under-performance):
[Average UOLe- DAM Schedule]* Zonal UCAP Price*Stop Loss Factor= charge (if
negative)
If Average UOLe is greater than the UCAP MW (for over-performance): [Average
UOLe – UCAP MW]* Zonal UCAP Price* Stop Loss Factor = payment (if posititive)
[95-90]* 6000*1= 30,000 They are eligible for up to a $30,000 credit.
This means that their total Capacity payments are (assuming no pro rata
allocation):
[Auction Revenue]+[Credit]=$540,000+$30,000=$570,000
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 18 DRAFT – FOR DISCUSSION PURPOSES ONLY
Next Steps
The next meetings will include additional
discussion on the proposed changes as well as
specifics on the treatment of other types of
resources (Demand Response, Intermittent
Resources, UDRs, etc.).
The next meeting is anticipated to be in March.
The NYISO welcomes all comments. Written comments can be sent to Debbie Eckels
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 19 DRAFT – FOR DISCUSSION PURPOSES ONLY
APPENDICES
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APPENDIX A: WHY THE
NYISO DOES NOT NEED TO
MAKE COSTLY CHANGES
TO ITS MARKET
STRUCTURE FOR FUEL
ASSURANCE
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Fuel Assurance
The NYISO does not need to make costly
changes to its Market Structure for Fuel
Assurance: New York faces a different problem than ISO NE and PJM
face, including different reliability needs.
The NYISO already has in place capabilities in its energy
and capacity markets that are important to fuel
assurance.
The NYISO also faces structural differences from PJM
and ISO NE.
The NYISO wants to establish incentives
tailored to the NY markets that will help us
maintain reliability going forward.
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 22 DRAFT – FOR DISCUSSION PURPOSES ONLY
Reasons why the NYISO does not need to
make costly changes to its Market
Structure for Fuel Assurance: Market
Features
– Ability for a supplier to offer unique hourly bids (DAM and RT)
so units can reflect changing costs.
– Integration of DARU and Reliability Units in the Day Ahead
Market, so these units receive day-ahead market schedules in
time to buy and schedule gas.
– Ability to increase hourly bids in real-time to reflect the
supplier’s expectation of fuel costs and manage the
consumption of gas over the day.
– Earliest Day-Ahead Market posting time: 930AM – two and half
hours before the next day gas nomination period ends and a
reliability commitment that is completed at the same time,
allowing resources committed in the forecast load pass to buy
and schedule gas.
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 23 DRAFT – FOR DISCUSSION PURPOSES ONLY
Reasons why the NYISO does not need to
make costly changes to its Market
Structure for Fuel Assurance: Market
Features
– Hybrid, offline GT and Shortage pricing: signals when short of
reserve, regulation, or transmission to incentivize resources to
procure fuel necessary to meet their schedule obligations and
reflect critical operating conditions.
– Monthly capacity market spot auctions, rather than an annual
procurement period, allows a resource to offer supply in the
winter and summer months based on the resource’s actual
availability during that time of year.
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 24 DRAFT – FOR DISCUSSION PURPOSES ONLY
Reasons why the NYISO does not need to
make costly changes to its Market
Structure for Fuel Assurance: Structural
Differences
• NY has different reliability needs which have led to NYC and LI dual
fuel requirements.
• ISO NE has inadequate natural gas pipelines- located at the end of
the pipelines, they have less access to natural gas.
• PJM and ISO NE have fewer dual fuel units – A substantial
proportion of NY’s gas fired resources have access to an alternate
fuel.
• Not all PJM or New England states have competitive gas markets.
In some states, gas is allocated by the LDC based on curtailment
rules, rather than willingness to pay, reducing the gas supply
available to gas fired generation on gas LDC systems.
• PJM is looking at significant coal retirements based in part on the
Mercury and Air Toxics Standards (MATS) and Regional Haze
programs.
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 25 DRAFT – FOR DISCUSSION PURPOSES ONLY
APPENDIX B: EFORd
BASELINE AND CURRENT
AEFORd METHOD
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What’s the baseline?
For generators, the NYISO uses an average of six
12-month EFORd calculations to establish a
Summer and Winter ICAP to UCAP derating factor
(the AEFORd). This means that the derating factors for Summer and Winter
blend both Summer and Winter GADS Data and effectively
weights some of the months more heavily than others.
Since some units are likely to have different
performance characteristics in the Summer and
Winter, the NYISO is considering a “like season
EFORd” baseline for the performance incentive
(“Baseline EFORd”).
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 27 DRAFT – FOR DISCUSSION PURPOSES ONLY
EFORd Example:
GADS
10
GADS
02
GADS
11
GADS
03
GADS
12
GADS
01
12 month EFORd = 12 mo GADS
GADS
08
GADS
05
GADS
09
GADS
06
GADS
07
GADS
10
GADS
02
GADS
12
GADS
01
GADS
04
GADS
05
GADS
04
GADS
06
GADS
09
NYISO uses an average of six 12-month EFORd calculations to establish a
Summer ICAP to UCAP derating factor (AEFORdsummer)
If month m is in the Summer Capability Period, its AEFORd = average of the GADs outage values
for the 12 month periods ending in July, Aug, Sept, Oct, Nov, Dec that precede month m.
If month m is in the Winter Capability Period, its AEFORd = average of the GADs outage values for
the 12 months periods ending in Jan, Feb, Mar, Apr, May, June.
12 month EFORd = 12 mo GADS
12 month EFORd = 12 mo GADS
12 month EFORd = 12 mo GADS
12 month EFORd = 12 mo GADS
12 month EFORd = 12 mo GADS
Used for
Summer
capability period
Starting May 1
Avg.
For Capability Period
beginning May 1
GADS
03
GADS
08
GADS
11
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 28 DRAFT – FOR DISCUSSION PURPOSES ONLY
“Like Season” Baseline EFORd
The objective is to have a baseline from which to
measure ICAP unit performance on Critical Operating
Days.
The “like season” baseline EFORd would use the data
from the past 3 “like” capability seasons to calculate
the EFORd. For example, the most recent 18 months of summer data would be
used to calculate the baseline for summer capability periods.
There would be no weighting of the months – each month would be
considered on the same basis.
The same rules would be used as are currently used in the EFORd
currently. • No additional data submittals would be required.
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 29 DRAFT – FOR DISCUSSION PURPOSES ONLY
“Like Season” Baseline EFORd
Example:
GADS
10
GADS
02
GADS
11
GADS
03
GADS
12
GADS
01
GADS
08
GADS
05
GADS
09
GADS
06
GADS
07
GADS
02
GADS
12
GADS
01
GADS
04
GADS
05
GADS
04
GADS
06
Uses the data from the past 3 “like” capability seasons with no weighting.
If month m is in the Summer Capability Period, its “Baseline EFORd” = average of the GADs
outage values for the 18 summer months that precede the summer capability period.
If month m is in the Winter Capability Period, its “Baseline EFORd” = average of the GADs outage
values for the 18 months that precede the winter capability period
6 mo GADS
For Capability Period
beginning May 1, 2015
GADS
03
GADS
09
GADS
08
GADS
07
GADS
11
2015 Summer 2014
GADS
10
GADS
02
GADS
11
GADS
03
GADS
12
GADS
01
GADS
08
GADS
05
GADS
09
GADS
06
GADS
07
GADS
05
GADS
04
GADS
06
Summer 2013 Summer 2012
+6 mo GADS +6 mo GADS
GADS
10
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 30 DRAFT – FOR DISCUSSION PURPOSES ONLY
Baseline EFORd
The NYISO calculated what the Baseline EFORd
would have been for Summer 2014 and Winter
2014-15 versus the existing EFORd:
The NYISO is considering if the EFORd used in the
auction should also be changed to the “like
season” baseline EFORd.
Generation Type*
Average
SUMMER 2014
EFORd
Average of
SUMMER 2014
Baseline EFORd
Average of
WINTER 2014-15
EFORd
Average of
WINTER 2014-15
Baseline EFORd
COMBINED CYCLE 6.4% 5.2% 5.0% 4.1%
COMBUSTION 12.0% 10.4% 13.4% 14.7%
FOSSIL FUEL 6.9% 6.9% 5.7% 6.9%
NUCLEAR STEAM 3.0% 2.3% 2.0% 3.7%
Average (all Types*) 10.0% 8.7% 10.4% 11.3%
* Some generation types have been omitted to preserve confidentiality however all units are included in the Average
© 2014 New York Independent System Operator, Inc. All Rights Reserved. 31 DRAFT – FOR DISCUSSION PURPOSES ONLY
APPENDIX C: CRITICAL
OPERATING DAYS
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Critical Operating Days
The NYISO will be instituting Critical Operating Day notices:
Can be called with two days notice, one day notice or in real-time.
The criteria have been updated
Removed the use of the external area forecast
Combined two other criteria
Two day notice: On a best efforts basis, the NYISO will declare a Critical
Operating Day by 17:00 two days prior to the operating day based on
forecasted conditions.
Conditions to declare a Critical Operating Day include:
• Load forecasts of greater than 30,000MW (without losses) for any hour of the day in
the Summer Capability Period (May 1-Octber 31). The source of the load forecast
used will be the posted load forecast on NYISO.com.
• Load forecasts of greater than 23,000MW (without losses) for any hour of the day in
the Winter Capability Period (November 1-April 30). The source of the load forecast
used will be the posted load forecast on NYISO.com.
• NYISO forecasting the inability to meet load or reserve requirements on a system
wide or locational basis
• Forecast of insufficient generation availability to meet transmission security (SENY
N-1-1 as an example).
33 © 2014 New York Independent System Operator, Inc. All Rights Reserved. DRAFT – FOR DISCUSSION PURPOSES ONLY
Critical Operating Days
One day notice, DAM post to real-time: On a best efforts basis,
the NYISO will declare a Critical Operating Day by noon on the
day prior to the operating day, based on forecasted conditions.
Conditions to declare a Critical Operating Day, if not already called
on a two day ahead basis, include:
• Load forecasts of greater than 31,200MW (including losses) for any hour
of the day in the Summer Capability Period (May 1-Octber 31). The source
of the load forecast will be the best available load forecast for the next
operating day.
• Load forecasts of greater than 24,200MWs (including losses) for any hour
of the day in the Winter Capability Period (November 1-April 30). The
source of the load forecast will be the best available load forecast for the
next operating day.
• NYISO forecasting the inability to meet load or reserve requirements on a
system wide or locational basis.
• Insufficient generation availability to meet transmission security (SENY N-
1-1 as an example).
• Issuing a Day Ahead Advisory for SCR/EDRP.
34 © 2014 New York Independent System Operator, Inc. All Rights Reserved. DRAFT – FOR DISCUSSION PURPOSES ONLY
Critical Operating Day Data
At stakeholder request, the following provides information
on what days would have been declared Critical Operating
Days had the criteria existed in 2012-2014.
Day Ahead and 2 Day Ahead forecasts from January 3, 2012
through October 28, 2014:
In the Winter Capability period the two day Day Ahead forecast
thresholds would have been met 9 times in 2014 (January 3, 7, 8, 22, 23,
24, 27, 28, 29), 8 times in 2013 (January 23, 24, 25 and December 12, 13,
16, 17, 18) and not at all in 2012. The Day Ahead criteria or any other
would not have caused any additional days to be declared Critical
Operating Days.
In the Summer Capability period the two day Day Ahead forecasts
thresholds would have been met 4 times in 2012 (June 21, July 16, 17,
18), 5 times in 2013 (July 10, 15, 16, 17, 18) and 0 times in 2014. The Day
Ahead criteria would have triggered the notice on June 20th 2012. The
SCR Criteria would have also indicated June 22nd was a Critical
Operating Day.
35 © 2014 New York Independent System Operator, Inc. All Rights Reserved. DRAFT – FOR DISCUSSION PURPOSES ONLY
APPENDIX D: EFORD
METRIC EXAMPLES
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Example 1- EFORd Base under-
performing example
Unit A 100MW unit has an AEFORd=0.1 and a summer baseline
EFORd=0.1
The ICAP Market Clearing Price for the area that includes the unit
(i.e., the Locality or NYCA clearing price) is $6/kW-Month (i.e.,
$6000/MW-Month). Unit A received a monthly ICAP market payment of 100* (1-0.1)*6000=$540,000 and
their UCAP is 100*(1-0.1)=90MW
In the month of July, there were 6 “two day ahead” called Critical
Operating Days. (i.e., stop loss factor SLF=1)
Unit A had a DAM schedule on all 6 Critical Operating Days
Unit A has a PI EFORd=0.2 for those 6 Critical Operating Days.
Unit A receives a charge of: [Baseline EFORd- PI EFORd]* MW ICAP* Zonal UCAP Price* SLF = charge (if
negative, and credit if positive)
[0.1-0.2]* 100*6000*1= -60,000 A $60,000 charge.
This means that their total Capacity payments are:
[Auction Revenue]-[Charge]=$540,000-$60,000=$480,000
37 © 2014 New York Independent System Operator, Inc. All Rights Reserved. DRAFT – FOR DISCUSSION PURPOSES ONLY
Example 2- EFORd Base over-
performing example
Unit B 100MW unit has an AEFORd=0.1 and a summer baseline
EFORd=0.1
The ICAP Market Clearing Price for the area that includes the unit
(i.e., the Locality or NYCA clearing price) is $6/kW-Month (i.e.,
$6000/MW-Month). Unit B received a monthly ICAP market payment of 100* (1-0.1)*6000=$540,000 and
their UCAP is 100*(1-0.1)=90MW
In the month of July, there were 6 “two day ahead” called Critical
Operating Days. (i.e., stop loss factor SLF=1)
Unit B had a DAM schedule on all 6 Critical Operating Days
Unit B has a PI EFORd=0 for those 6 Critical Operating Days.
Unit B receives a credit** of: [Baseline EFORd- PI EFORd]* MW ICAP * Zonal UCAP Price* SLF= charge (if
negative, and credit if positive)
[0.1-0]* 100*6000*1= 60,000 A $60,000 credit.
This means that their total Capacity payments are:
[Auction Revenue]-[Charge]=$540,000+$60,000=$600,000
** Assumes that sufficient revenue has been collected from under-performers
38 © 2014 New York Independent System Operator, Inc. All Rights Reserved. DRAFT – FOR DISCUSSION PURPOSES ONLY
Example 3- EFORd Scaling example
Unit B 100MW unit has an AEFORd=0.1 and a summer baseline
EFORd=0.1
The ICAP Market Clearing Price for the area that includes the unit
(i.e., the Locality or NYCA clearing price) is $6/kW-Month (i.e.,
$6000/MW-Month). Unit B received a monthly ICAP market payment of 100* (1-0.1)*6000=$540,000 and
their UCAP is 100*(1-0.1)=90MW
In the month of July, there was one “two day ahead” called Critical
Operating Days (stop loss factor SLF=0.2).
Unit B had a DAM schedule on the single Critical Operating Day.
Unit B has a PI EFORd=0 for that one Critical Operating Days.
Unit B receives a credit** of: [Baseline EFORd- PI EFORd]* MW ICAP * Zonal UCAP Price* SLF= charge (if
negative, and credit if positive)
[0.1-0]* 100*6000*0.2= 12,000 A $12,000 credit.
This means that their total Capacity payments are:
[Auction Revenue]-[Charge]=$540,000+$12,000=$552,000
** Assumes that sufficient revenue has been collected from under-performers
39 © 2014 New York Independent System Operator, Inc. All Rights Reserved. DRAFT – FOR DISCUSSION PURPOSES ONLY
Example 4 – EFORd comparing a
“good performer” and a “bad
performer”
Unit X 100MW unit has an AEFORd=0.1 and a summer baseline
EFORd=0.1.
Unit Z 100 MW unit has an AEFORd=0.5 and a summer baseline
EFORd=0.5.
The ICAP Market Clearing Price for the area that includes the units
(i.e., the Locality or NYCA clearing price) is $6/kW-Month (i.e.,
$6000/MW-Month). Unit X received a monthly ICAP market payment of 100* (1-0.1)*6000=$540,000 and
their UCAP is 100*(1-0.1)=90MW
Unit Z received a monthly ICAP market payment of 100* (1-0.5)*6000=$300,000 and
their UCAP is 100*(1-0.5)=50MW
40 © 2014 New York Independent System Operator, Inc. All Rights Reserved. DRAFT – FOR DISCUSSION PURPOSES ONLY
Example 4 (cont.)
In the month of July, there were 6 “two day ahead” called Critical
Operating Days (the stop loss factor SLF=1).
Both units had a DAM schedule on all six Critical Operating Days.
Both units had complete forced outages on two of the days and
operated without a problem on the other three Critical Operating
Days.
Unit X PI EFORd= 2/6 =0.333
Unit Z PI EFORd = 2/6 =0.333
Unit X receives a charge of:
[Baseline EFORd- PI EFORd]* MW ICAP* Zonal UCAP Price* SLF =
charge (if negative, and credit if positive)
[0.1-0.333]* 100*6,000*1= -139,800 A $ 139,800 charge.
This means that their total Capacity payments are:
[Auction Revenue]-[Charge]=$540,000 - $ 139,800 =$400,200
41 © 2014 New York Independent System Operator, Inc. All Rights Reserved. DRAFT – FOR DISCUSSION PURPOSES ONLY
Example 4 (cont.)
Unit Z receives a credit** of:
[Baseline EFORd- PI EFORd]* MW ICAP* Zonal UCAP Price* SLF =
charge (if negative, and credit if positive)
[0.5-0.333]* 100*6,000*1= 100,200 A $ 100,200 credit.
This means that their total Capacity payments are:
[Auction Revenue]+[Credit]=$300,000+ $ 100,200 =$400,200
Because both units performed the same in July on the six Critical
Operating Days, both units had the same ICAP Auction revenue net
of the Performance Incentive payments.
Unit X [Auction Revenue]-[Charge]=$540,000 - $ 139,800 = $400,200
Unit Z [Auction Revenue]+[Credit]=$300,000 + $ 100,200 = $400,200
** Assumes that sufficient revenue has been collected from under-performers